A Decade of Moving Next Door

I’ve been following taxpayer migration data for years, but in a haphazard way. A new study that I’ve coauthored for the RI Center for Freedom & Prosperity finally gave me the opportunity to review all fifteen years of available data from the IRS.

The picture — from the 2003 beginning of what can only be described as an exodus — is frightening. After accounting for the tens of thousands of Rhode Islanders who moved to other states and other taxpayers who moved in the opposite direction, Rhode Island lost 24,455 households, with $1.2 billion of annual income (not inflation adjusted). More conspicuously, a net 3,406 taxpayers moved right across the border, to abutting counties in Massachusetts and Connecticut, taking with them $254.5 million in annual adjusted gross income (AGI).

And when I say that they moved right across the border, I mean that literally, as this chart from the study shows. (Note that the chart is out-migration, not net.)

The bottom line is that a state in its 41st month of unemployment above 10% and (most likely) its tenth year of net taxpayer out-migration (including a net loss of income) cannot afford to hang its hope on incremental improvements and technocratic adjustments. This trend is eminently reversible, and once again, it comes down to a choice that Rhode Islanders have to make.

We left for a "higher tax" state, moved my spouses biz and I found a job fairly fast in the new state. We moved to a place we both had ties to, the loss on the house in RI hurt a lot but houses here cost less.

The irony is that though our new state has a stated tax rate that's higher than RI since RI eliminated itemizing our state taxes are actually lower than RI. Plus the car taxes and property taxes are substantially lower. They are nice to you at the DMV too.